Pickrose Co Ltd (t/a Long Airdox (Cardox) Ltd) v Jones & Ors [1992] UKEAT 300_91_0805

EAT

Pickrose Co Ltd (t/a Long Airdox (Cardox) Ltd) v Jones & Ors

[1992] UKEAT 300_91_0805 · 1992-05-08

JUDGE HAGUE:

This is an appeal by employers, a manufacturing company at the material time called Pickrose & Co Ltd ("Pickrose"), and now called Long Airdox (Cardox) Ltd, against the decision of an Industrial Tribunal sitting at Manchester sent to the parties on 30th April 1991. By their decision, the Tribunal found that Mr Ivor Jones, who had been made redundant, had been unfairly dismissed and awarded him compensation in the total sum of £7,392.97. Pickrose appeal against both the finding of unfair dismissal and the quantum of compensation.

The decision of the Tribunal was also concerned with claims made by two other employees of Pickrose, Mr Millar and Mr Height. The Tribunal found that they had each been unfairly dismissed, by reason of lack of consultation as to their redundancy, but that consultation would have made no difference and so they were not entitled to compensation apart from their basic awards which were offset by the redundancy payments they received. There were no appeals in their cases, and so we are not concerned with them.

At the relevant time, Pickrose was engaged in the manufacturer of mining products. It had a number of departments, including a machine shop and stores departments. Mr Jones started employment with Pickrose on 17th January 1985, and was a horizontal borer in the machine shop department. However, on 23rd March 1987 he suffered an accident at work which resulted in the loss of his sight in one eye. As a result he was absent from work until about June 1990, and on his return he was unable to resume his previous work. He was therefore employed in the Stores department. He worked in the Tools Store (but not in the General Store) from then until he was selected for redundancy, dismissed and given wages in lieu of notice at or shortly after the end of August 1990. He had taken a reduction in wages, and there was never any suggestion that he was working in Stores temporarily.

In the first part of 1990, Pickrose suffered a rapid and serious deterioration in its order book, and in July and August it became clear to the management that there would have to be redundancies. This was announced to a meeting of the workforce on 20th August 1990. Immediately after the meeting Mr Booth, the works director, had a meeting with the shop stewards in which he indicated that the criteria used for selection for redundancy would be the same as had been used in a previous redundancy situation in 1989. Those criteria read as follows:

"To ensure uniform standards were applied to the situation of redundancy the following criteria was used in the selection of employees who were to be made redundant -(a) skill levels,

(b) flexibility,

(d) work attitude,

(e) self-motivation".

Mr Booth (misnamed Mr Wood in the Decision) then instructed his various departmental managers to make the necessary selections, indicating what reductions were required for each department. Mr Morris was the manager in charge of the machine shop. He gave evidence to the Tribunal that he had applied the criteria as regards the machine shop, and selected Mr Millar and Mr Height. The Tribunal accepted his evidence and found he had duly applied the criteria and acted reasonably. The Tribunal went on to hold that there had not been sufficient consultation, which rendered their dismissals unfair, but that consultation would have made no difference.

The Stores Manager did not give evidence. The only relevant evidence about the selection of Mr Jones for redundancy contained in the Chairman's Notes is a short extract from Mr Booth's evidence which reads:

"The Stores Manager told me that he was selecting Jones because he wasn't a store man and didn't have the necessary skills. We wanted to reduce the Stores by 2 and 1 was leaving".

There were in fact 4 employees in Stores, one of whom was leaving voluntarily. The remaining 2 were Mr Conaghan and Mr Holt. The evidence was that they had only been employed by Pickrose for 6 months or so, but they had both had previous store-keeping experience and had been in Stores longer than Mr Jones.

The Tribunal's decision as regards Mr Jones is set out in paragraph 10 of their Reasons. After dealing (in the previous paragraph) with Mr Millar and Mr Height, the Tribunal say:

"10. The position with regard to Mr Jones is somewhat different. Had the respondents told us that the criteria had been applied to him and the others within the stores and that Mr Jones fell to be selected on the basis of the criteria, there is nothing we could have done. But the respondents did not say that. It was clear from Mr Booth's evidence that the criteria were not applied to Mr Jones, and that he was selected, basically, on the grounds that he was not a storeman. Clearly he was a storeman from the time he returned to work from illness in June 1990. He had taken a reduction in wages to go into the stores, and had the respondents been asked to apply a job description to him if there had been no redundancy we are quite sure that they would have described him as a storeman. If employers have criteria for selection they must apply those criteria in all cases. They did not do so in Mr Jones' case and, therefore, we cannot say that he was fairly selected for redundancy. Although, therefore, there was a redundancy situation as far as he was concerned and although consultation would have made no difference, failure to select him properly for redundancy must entitle him to compensation. ..."

Mr Grundy, Counsel for Pickrose, has attacked those findings on the basis that they contain an obvious and clear misrepresentation of the evidence given by Mr Booth. He said that the evidence was merely to the effect that the Stores Manager did not regard Mr Jones as an experienced storeman, and he pointed out that in the "Redundancy List" which was referred to in the evidence, Mr Jones is listed under the heading "Stores". Yet, said Mr Grundy, the Tribunal apparently thought that Mr Jones had been selected on the ground that he was not working in the Stores, or was working there only temporarily and not properly as a storeman. We see the force of this, but we agree with Mr Carr, Counsel for Mr Jones, that the real finding of the Tribunal was that they were not satisfied that the criteria had been applied. The Tribunal heard no evidence to that effect, and the only ground for Mr Jones' dismissal was related only to his skill levels, and not on the other criteria. Mr Carr pointed out that there was no document making comparisons on the criteria between the various Stores employees, of the kind frequently found in such cases. In our view, the finding that the criteria had not been applied was a finding of fact which the Tribunal was entitled to come to, and we cannot interfere with this part of the Tribunal's findings.

We turn to the matter of compensation. Mr Grundy (who was at the Tribunal hearing) told us that in the course of announcing orally the Tribunal's decision, the Chairman said that "it was likely that if the criteria had been properly applied in the Stores, Mr Jones would have been selected for redundancy", or words to that effect. Mr Grundy then pointed out that this point would vitally affect the compensatory award, because under S.74, Employment Protection (Consolidation) Act 1978 the employee is compensated for his loss sustained in consequence of the dismissal "in so far as that loss is attributable to action taken by the employer." According to Mr Grundy, the Chairman then said his remarks were pure speculation on his part. What Mr Grundy told us is effectively confirmed by the later part of paragraph 10 of the Tribunal's Reasons, delivered subsequently in writing, which reads as follows:

"...I did remark when I was announcing the decision that had the respondents applied the criteria correctly within the stores it is likely that Mr Jones would have been selected. Mr Grundy seized upon this remark to suggest that there ought to be some reduction in the compensation paid to Mr Jones. The remark I made was purely speculative. I do not know the answer to the question, nor do the respondents because they never applied the criteria correctly. What I was implying was that if the respondents had said they had applied the criteria within the stores then it would not have been open to us to challenge Mr Jones' selection."

Mr Grundy submitted that the Chairman's remarks were given as part of the reason for the Tribunal's decision and were clear and unambiguous. He submitted that the Chairman was not entitled to withdraw or qualify his remarks when giving the written Reasons. In support of that submission, Mr Grundy referred us to Hanks v. Ace High Productions

[1978] ICR 1155

at p.1158C, Arthur Guinness & Co (Great Britain) Ltd v. Green

[1989] ICR 241

at p.244 and Spring Grove Services Group Plc v. Hickinbottom

[1990] ICR 41

In our judgment, the Chairman was entitled to take the course he did. In the first place, the remark was not really part of the decision which the Chairman announced and formed no part of the reasoning. Under Polkey v. A E Dayton Services Ltd

[1988] AC 344

, it was not a matter relevant to the finding of unfair dismissal, and there had been no evidence as to whether Mr Jones would or would not have been dismissed if the criteria had been applied. Secondly, in our view the Chairman was only explaining his remark and not resiling from it. Thirdly, even if he was in effect resiling from it, he was entitled to do so, because it was the rectification of a simple error and in no way altered the decision announced; the Hanks decision makes it clear that there is power in the Tribunal to correct such an error. Accordingly, if the matter had rested there, we would not have interfered with the Tribunal's assessment of the compensation.

However, the matter does not rest there. It is clear from the Polkey decision that the question "would it have made any difference" is relevant, and may be of considerable importance, on the assessment of compensation, as a result of S.74 of the 1978 Act. An Industrial Tribunal must consider the question and decide whether, and if so to what extent, it affects the compensation, and make any adjustment to the compensation which they think appropriate. As Browne-Wilkinson J. put it in Sillifant v. Powell Duffryn Timber Ltd

[1983] IRLR 91

at p.96 (in a passage cited with express approval by Lord Bridge of Harwich in Polkey ):

"There is no need for an 'all or nothing' decision. If the industrial tribunal thinks there is a doubt whether or not the employee would have been dismissed, this element can be reflected by reducing the normal amount of compensation by a percentage representing the chance that the employee would still have lost his employment."

The Tribunal in the present case did not consider this question, and indeed they had no evidence on which to come to a proper conclusion on it. The Tribunal said merely "we cannot say he would have been selected had the criteria been applied", and on that basis made no deduction from the full amount of compensation to which he was otherwise entitled. The Tribunal thus considered that no deduction should be made unless it was proved that Mr Jones would have been selected and effectively made what Browne-Wilkinson J. termed an "all or nothing" decision. In our judgment, that involved a failure to carry out the exercise required by S.74 of the 1978 Act in accordance with the principles set out above.

We therefore allow this appeal as to quantum of compensation only, and remit the matter to be re-heard by the same Tribunal (assuming that is practical), but on that question only.